Market close: NZ shares fall, Telecom departs NYSE

BUSINESSDESK: New Zealand shares fell, paced by Telecom, as the biggest company on the bourse said it would delist its NYSE-traded American depositary receipts and that it would meet profit guidance by cutting costs. 

Steel & Tube, which is to drop out of the NZX 50 Index this month, rebounded.

The NZX 50 fell 24.48 points, or 0.7%, to 3449.47. Within the index, 21 stocks fell, 22 rose and seven were unchanged. Turnover was $99.7 million.

Telecom dropped 2.6% to $2.43. Among cost cutting measures, the company will delist its ADRs from the New York Stock Exchange, effective July 19.

“Investors are viewing it as a negative,” said Michael Milne, investment adviser at Craigs Investment Partners. “Fletchers, Telecom and the blue chips are the sort of companies that international investors tend to hold.”

Chorus, the network company spun off from Telecom in November, fell 1.9% to $3.14.

Shares in New Zealand Oil & Gas rose 2.7% to 77 cents after the energy explorer said it expects to pay a fully imputed dividend of six cents per share this financial year. The company had received a number of informal questions on its intention for the year.

Warehouse rose 0.8% to $2.53 after the country's biggest listed retailer was granted approval to delist from the Australian stock exchange. The company wants to quit the ASX to keep a lid on its costs.

Air New Zealand shares rose 1.2% to 86 cents after trans-Tasman rival Qantas was put on rating watch by Standard & Poor's after the Australian airline said it expects to post an annual loss of $A450 million in the 2012 financial year.

Qantas has an investment grade BBB rating, and its shares fell 9% to 96.5 Australian cents on the ASX in afternoon trading.

Shares in Diligent Board Member Services rose 0.6% to $3.52 and Xero gained 4.4% to $4.49 as investors continued to rally behind the two newest entrants in the benchmark NZX 50 index.

The tech companies will officially join the index from June 18, when they replace manufacturers Rakon, which was unchanged at 48 cents today, and Steel & Tube, which gained 2.4% to $2.11 today.

Kathmandu, the outdoor equipment chain, dropped almost 4% to $1.45. Skellerup Holdings, which makes rubber goods and milking equipment, fell 2% to $1.38.